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Hong Kong property
Business
Victoria Allan
Victoria Allan

Concrete Analysis | How Hong Kong’s luxury property market adapted to Covid-19 and re-emerged as an attractive asset class in 2021

  • Values in the mass sector were up 3 per cent, and 3.9 per cent at the luxury end of the market as of July, according to JLL
  • But these figures do not reveal how US$10.3 million bought a very different flat in 2018 than it does today, and will in the future

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The duplex apartments at Pine Lodge in Shouson Hill. Photo: Handout
Victoria Allan
Hong Kong’s ever resilient property market is having a fruitful 2021 so far. Unprecedented confidence has returned to the market, and sales figures are topping 6,500 per month – not bad for a market that was wracked by uncertainty just 12 months ago. A new MTR line, Tuen Ma, and surprising economic numbers have pushed values in the mass sector up 3 per cent as of July, and 3.9 per cent at the luxury end of the market, according to JLL.
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The luxury sector has always been a singular creature: seemingly impervious to shocks and often an indicator of the mass market’s direction. The unleveraged, highly liquid luxury market has little new supply on the horizon and there is strong demand for what is available, which has returned luxury residential property to its position as an attractive asset class.

Notable, however, is how quickly luxury property prices have responded to shifting buyer demands and social trends that emerged at the zenith of the Covid-19 pandemic last year, many of which are here to stay.

The 3.8 per cent price gains calculated by the Rating and Valuation Department only for the first seven months of 2021 only tells part of the story, and does not reveal how HK$80 million (US$10.3 million) bought a very different flat in 2018 than it does today, and will in 2022.

Prospective luxury buyers are looking for features that transcend price, and which sellers are coming to understand can demand a premium. As more people spend time working, learning and entertaining at home, anyone currently considering an upgrade is looking to tick a series of boxes that have quickly become de rigueur in the new Covid-19 lifestyle. These include properties with generous indoor space and spare bedrooms, functional outdoor space, views of the water or the hills, easy access to beaches, hiking and other recreation, separate areas for home offices, studies and family rooms, and, now, high-spec renovations that virtually eliminate the time between signing a purchase agreement and moving in.

The numbers speak for themselves. Look at Pine Lodge in Shouson Hill. The low-rise complex completed in 1979 comprises 16 duplex apartments with some kind of terrace. The properties are spacious and nestled in a quiet corner of Deep Water Bay. At the market’s previous peak in 2018 homes here averaged around HK$85 million. But when it became clear that the pandemic was going to linger and we would all be working – and learning and socialising – from home for an extended period, Pine Lodge gained considerable luxury cache.

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